DECLARATORY RELIEF:
ASSOCIATION OF INTERNATIONAL SHIPPING
LINES, INC., APL CO. PTE LTD., AND MAERSK-FILIPINAS, INC., PETITIONERS, VS.
SECRETARY OF FINANCE AND COMMISSIONER OF INTERNAL REVENUE, RESPONDENTS.
FACTS:
On July 1, 2005, Republic Act No. 9337 (RA 9337) was
enacted amending certain provisions of the National Internal Revenue Code.
On January 30, 2008, Commissioner of Internal Revenue
(CIR) Lilian Hefti issued Revenue Memorandum Circular No. 31-2008 (RMC 31-2008)
seeking to clarify certain provisions of the NIRC. One of the questions by the petitioners was the
imposition of regular tax rate of 30%
and 12% VAT on the demurrage and detention fees collected by international
shipping carriers from shippers or consignees.
On December 6, 2010, petitioners Association of
International Shipping Lines, Inc. (AISL), APL Co. Pte. Ltd. (APL) and
Maersk-Filipinas, Inc. (Maersk) sought to nullify RMC No. 31-2008 via a
petition for declaratory relief under Civil Case No.
Q-09-64241 praying for the
issuance of a writ of preliminary injunction enjoining then CIR and her agents
from implementing, enforcing or acting pursuant to or on the basis of the
challenged provisions of RMC 31-2008 and render judgment declaring these
challenged provisions void.
It alleged that RMC 31-2008 was void as it imposed
regular tax rate of 30% and 12% VAT on the demurrage and detention fees
collected by international shipping carriers from shippers or consignees for
delay in the return of containers, on the domestic portion of services to
persons engaged in international shipping operations, and on commission income
received by local shipping agents from international shipping carriers or in
connection with inbound shipments.
On May 18, 2012, RTC Branch 98 in
Civil Case No. Q-09-64241 declared
as invalid the challenged provisions of RMC 31-2008 insofar as it subjects
demurrage and detention fees to the regular corporate income tax under Section
28(A)(1) and 12% VAT.
On March 7, 2013, RA 10378 was enacted amending Section
28 (A)(3)(a) of the NIRC.
On December 4, 2013, petitioners initiated a petition
for declaratory relief challenging Section 4.4 of RR 15-2013 (implementing
rules of RA 10378) and impleading both the Secretary of Finance and CIR.
On September 15, 2015, RTC dismissed the petition for
declaratory relief and granted the motion for judicial notice of the existence
of RMC 31-2008, May 18, 2012 RTC Order in Civil Case No. Q-09-64241 and the
enactment of RA 10378 – all these being official acts of different branches of
government
The RTC also declared that it had no jurisdiction over
the petition for declaratory relief pursuant to CA 55 which removed from RTC
the authority to rule on cases involving one’s liability for tax, duty, or
charge collectible under any law administered by the Bureau of Customs (BOC) or
BIR.
On January 8, 2016, petitioners’ partial motion for
reconsideration was denied.
Petitioners, on pure questions of law, sought for
Supreme Court’s discretionary appellate jurisdiction to review. They reiterated the arguments raised in their
petition for declaratory relief.
ISSUE:
Whether a petition for declaratory relief proper for
the purpose of invalidating RR 15-2013
RULING:
No.
One of the requisites
for an action for declaratory relief is
that it must be filed before any breach or violation of an obligation as stated
under the Rules. Thus, there is no actual case involved in a Petition
for Declaratory Relief. It
cannot, therefore, be the proper vehicle to invoke the judicial review powers
to declare a statute unconstitutional. As decreed in DOTR v. PPSTA (G.R. No. 230107, July 24,
2018), the proper remedy is certiorari or
prohibition.
Nonetheless, the court held in Diaz et al v. Secretary of
Finance, et al (G.R. No. 193007, July 19, 2011): “But there are
precedents for treating a petition for declaratory relief as one for
prohibition if the case has far-reaching implications and raises questions that
need to be resolved for the public good. The Court has also held that a
petition for prohibition is a proper remedy to prohibit or nullify acts of
executive officials that amount to usurpation of legislative authority. xxx
Although the petition does not strictly comply with the requirements of Rule
65, the Court has ample power to waive such technical requirements when the legal
questions to be resolved are of great importance to the public. The same may be
said of the requirement of locus standi
which is a mere procedural requisite.”
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